Co-op chairman Henry van der Heyden and fellow director Greg Gent attended a Federated Farmers-organised meeting in Stratford last week to front up on a range of issues.

Peter Adamski of Taranaki Dairy Farmers of New Zealand said the concern over tactical pricing - mostly aimed at heading off competitors in Canterbury and Waikato - had been such that some Taranaki farmers were rumoured to be considering pulling out of Fonterra and setting up a rival dairy plant.

At the moment, all Fonterra suppliers must hold co-op shares in proportion to the milk they supply, with all shareholders paid for their milk at the same rate.

Under the tactical pricing plan - due to be introduced next season - if a farmer can show he has a genuine offer from a competitor, Fonterra will come up with a "one-time" counter-offer. That means different Fonterra suppliers could be offered different prices.

But a farmer taking up a tactical pricing offer will have to sell all his shares and supply milk to Fonterra under a special contract, thus avoiding the possibility of different shareholders being paid different rates - a move that would be against the co-op ethos.

Previously, the national Dairy Farmers of New Zealand chairman Frank Brenmuhl has said farmers are likely to have fewer problems with this scheme than one in which different prices were paid simply on the basis of where shareholders lived.

Source: The New Zealand Herald